ECJ ruling further dims EU-US data protection outlook

Significance

The ECJ ruling could add to potential disruptions to transatlantic commercial data flows arising from the EU's developing data protection regime that a study for the US Chamber of Commerce valued at 0.8-1.3% of EU GDP. The ruling weakens the United States in negotiations over the new EU regime, as well as over the Transatlantic Trade and Investment Partnership (TTIP).

Impacts

• The ruling may bolster development of EU-based cloud facilities as EU users seek to avoid the risks of US-based data storage.
• This could reduce US firms' estimated 76% share of the EU cloud market.
• It would also lead to further fragmentation of the internet as a global resource.